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HomeMy WebLinkAbout1983-05-23 83-199 RESOLVE83-199 Introduced by Councilor FzaMel, Nay 23, 1983 CITY OF BANGOR RmE) 16WILIPy AUTHORIZING THE ISSUANCE AND SALE OF A REVENUE OHLIGA ION SECNRITY Under the MfINICIPAL SECNRITIBS APPROVAL PROGRAM for Kenduskeag Valley Associates By Ow City CmmuQ of City ofBoa mr% RESOLVED, WHEREAS, the City of Bangor, acting pursuant to the Maine Guarantee Authority Act (the Act), as amended, (30 M.R.S.A. 5 1001 at seq.) has applied to the Maine Guarantee Authority (MGA) for approval of the issuance by the City of Bangor of a Revenue Obligation security under the Municipal Securities Approval Program, Subchapter IV of the Act, in connection with the 'acquisition and reconstruction of an existing building known as the Eirstein Block located at 42-50 Central Street in Bangor by Nenduakeag Valley Associates to be known as the Henduskeag Valley Associates Reconstruction Project (the Project), and WHEREAS, the Maine Guarantee Authority has issued its Certificate of Approval with respect to the Project pursuant to S 1063 of the Act, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Bangor, Maine, that pursuant to the Act, the City will assist in financing the Project by issuing a Revenue Obligation Security not to exceed Six Hundred Fifty Thousand Dollars ($650,000), AND BE IT FURTHER RESOLVED, AS FOLLOWS: Section 1. That theCity of Bangor is hereby authorized In City council May 23,1983 Passed c Y Cl¢ � 83-199 N E S O L P E is - 97 .n) pursuant to the Act to issue to Maine National Bank a Revenue Obligation Security in an aggregate principal amount not to exceed Six Hundred Fifty Thousand Dollars ($650,000) (the Securi- ty) to finance the cost of the Project, the principal and inter- est on the Security to be payable solely by Kenduskeag Valley Associates from revenues of the Project. Section 2. That the obligation of Kenduskeag Valley Associ- ates to the City shall be represented by a Promissory Note and Loan Agreement and secured by a mortgage on the real property and a properly filed security interest in all personal property to be used in the Project, such a mortgage and security interest to run from Kenduskeag Valley Associates as mortgagor and borrower to the City as mortgagee and secured party under a Mortgage and Security Agreement, and to be assigned by the City to Maine National Hank as Trustee (the Trustee), and further that the Promissory Note will be endorsed by the City to the Trustee. Section 3. That the obligation represented by the Security shall be further secured by an Indenture of Trust between the City of Bangor and Maine National Bank as Trustee (the Inden- ture). Section 4. That the execution and delivery of the Promisso- ry Note and Endorsement, Loan Agreement, Mortgage and Security Agreement, Assignments and Indenture substantially in a form used by the City for previous financings, and to be approved by the City Solicitor, is hereby authorized. The Chairman of the City Council, the City Finance Director and City Manager are each hereby authorized, acting singly, to execute and deliver the -2- Promissory Note and Endorsement, Loan Agreement, Mortgage and Security Agreement, Assignments, Indenture, and associated and additional documents which may be necessary or convenient to the issuance of the security with such changes, insertions and omissions as may be approved by the Chairman of the City Council, City Finance Director or City Manager upon advice of the City Solicitor. The execution of the documents described herein by the Chairman of the City Council, City Finance Director or City Manager shall be conclusive evidence of such approval. The City Clerk and Deputy City Clerk are each hereby authorized to affix the seal of the City on any and all of the documents described herein and to attest the same. Section 5. That the Security shall be in the form of a promissory note, bond or other evidence of indebtedness as set forth in the indenture, and shall be subject to the following terms and conditions: a. The. Security shall be dated as of the date of issue. b. The Security shall be issued and sold at a price of one hundred percent (1008) of its principal amount. c. The Security shall bear interest at a rate of seventy-five percent (758) of the floating prime rate of the First National Bank of Boston, determined as of the close of business each day, for the first five (5) years; then at a rate of eighty percent (808) of such prime rate of the First National Bank of Boston, determined as of the close of business each day, -3- for the remaining ten (10) years, such interest to be paid monthly as provided in the Indenture. d. The principal of the Security shall be repaid in monthly installments as provided in the Indenture, which are expected to be $2,750.00 for the first five years; then in monthly installments of 4,041.67 over the next 10 years; such payments commencing on the day which is thirty (30) days follow- ing the completion of the project, but in no event later than January 30, 1984. e. The Security may be redeemed or prepaid without penalty or premium at the option of the City of Bangor, which option shall be exercised only at the request of Kenduskeag Valley Associates. All funds necessary for redemption or prepay- ment, including payment of interest to date of redemption, shall be provided by Kenduskeag Valley Associates. In the event it is determined that the Security fails to qualify as an industrial revenue bond, interest on which is exempt from Federal income tax pursuant to Section 103 of the Internal Revenue Code or regu- lations thereunder, Kenduskeag Valley Associates shall immmediate- ly pay to the holder of the Security the difference between the interest rate applicable to the Security and the regular commer- cial rate applicable to the Security and the regular commercial rate or rates in effect in the City of Bangor; Maine, and de- termined by the Trustee, during the period commencing with the date from which interest on the Security is determined to be taxable, and terminating on the date such termination is made, and shall continue to pay such difference until the Security is -4- prepaid in full or satisfied according to its terms at the date of maturity. f. The Security shall be in registered form and may be issued as a single document or as separate documents as provided in the Indenture. The Security shall be manually executed in the name of the City of Bangor by the Chairman of the City Council and by the City Finance Director and shall be payable at the office of the Trustee in Bangor. g. No interest in the Security may be sold to any firm, partnership, corporation or association, which is a party to any contract pertaining to the Project or which is to pur- chase, rent, lease or otherwise occupy any premises constituting a part of the Project, or to any affiliate or subsidiary thereof. h. The proceeds of the Security shall be used solely for the purposes for which they are authorized and permitted by the Act and shall be disbursed by the Trustee as provided in the Indenture. 1. T£ the Security shall become mutilated, destroyed or lost, it may be replaced, provided there is furnished in a form satisfactory to the City Finance Director an appropriate document of indemnity protecting the City of Bangor from any claim or obligation with respect to the Security asserted to have been mutilated, destroyed or lost. Section 6. That the Security to be issued pursuant to this Resolution shall not constitute any debt or liability or pledge of the faith and credit of the State of Maine, its political subdivisions, or any municipality, or of the City of Bangor or -5- any division, department or political subdivision thereof, and the obligation represented by the Security shall be payable solely from the revenues of the Project, which revenues may be pledged in whole or in part as security for the obligation in accordance with the terms of the Indenture. The Security shall contain on its face a statement to the effect that the Securities shall not constitute any debt or liability or a pledge of the faith and credit of the State of Maine, its political subdi- visions, or the City of Bangor, or any division, department or political subdivision thereof, and shall be payable solely from revenues of the Project. Issuance of the Security shall not directly, indirectly or contingently obligate the City of Bangor or any division, department or political subdivision thereof to levy or pledge any form of taxation whatever or to make any appropriation for its payment. Section ]. That the Promissory Note shall provide that revenues to the City from the Project will at all times be sufficient to pay the principal of and interest on the Security as the same shall become due and payable and to create and maintain reserves for such purposes. The Promissory Note will provide that when the Security shall have been paid in full and all other obligations of Kenduskeag Valley Associates under the Promissory Note have been satisfied, then the City of Bangor will discharge any mortgage and release any security interest remain- ing in the assets of Kenduskeag Valley Associates. Section S. That notice of the intent of the City of Bangor to issue the aforesaid Revenue Obligation Security, which notice -6- shall contain the information required by Title 10 M.R.S.A. S 1064, as amended, shall be published at least once in the Nennebec Journal and in the Bangor Daily News no later than fourteen (14) days after the date on which these resolutions are adopted. Section 9. That the City Manager, City Finance Director and the Chairman of the City Council, acting singly, be and each of them hereby is authorized to take all action, including the execution and delivery of documents and evidences of indebtedness as may be necessary, desirable and/or appropriate in order to carry into effect the full purport and intent of the preceding resolutions or any of them. -7-